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Mobile Wallet - Tech Startup - $1 Billion Opportunity

The market is changing. The future is changing. The banking and telecom business are challenging each other. The shift is clearly see. This is fusion of Banking and Telecom opportunity. This is future for both. This is One of best Tech Startup from Kuwait. Looking to be $1 Billion Startup.

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MOBILE MONEY
• The definition of “mobile money” varies across the industry as it covers a wide scope of
overlapping applications. In general, mobile money is a term describing the services that
allow electronic money transactions over a mobile phone. It is also referred to as mobile
financial services, mobile wallet and mobile payment. In this report, we define mobile money
as a broader term that includes all types of monetary transactions executed via mobile
phones.
• A wide range of mobile money applications have developed throughout the years. Some
major categories include:
• 1. Mobile banking — use of a mobile phone to remotely access a bank account, primarily for
account balance checkup and bill payment services
• 2. Mobile money transfer (remittance) — a peer-to-peer application making use of a mobile
phone to send money to family or friends, primarily across international borders
• 3. Mobile commerce (payment)— use of a mobile phone to perform financial transactions
for purchases or sales, either remotely or on-site, retrieve promotion information or
coupons, and deliver gift items
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CHANGING WORLD
• According to Accenture report in 2013, by 2020, Banks
could lose 15 percent of their market share to technology
companies.
• Gartner Report predicts, Global mobile transaction
volume and value to average 35 percent annual growth
between 2012 and 2017, expected to grow to worth
$721 billion with more than 450 million users by 2017.
• Overall, the whole mobile ecosystem’s revenue was
US$1,551 billion in 2012, equivalent to 2.2% of global
GDP.
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JAPAN, KOREA & KENYA
• Japan is world’s third biggest economy. Over 70 million people in Japan own tap-and-go phones, and their use is on the rise. In contrast,
78 million Japanese use mobile-wallet enabled cell phones.
• Japan has the largest number of subscribers. Japan, has highest number of NFC-enabled cards and phones, it has the highest
penetration in the world.
• Korea -Since the end of 2013, the population of Korea has reached about 48 million. However, the number of mobile phone
subscribers is roughly 54.8 million, including 37.8 million smartphone users as of January 2014. This means that the majority of the
population is using smartphones, and the dependence on smartphones and applications is stronger today than ever before.
• Due to this vast spillover of a mobile lifestyle, the size of mobile shopping is increasing from 4.5 trillion won in 2013 to more than 10
trillion won this year, according to the Korea On-Line Shopping Association (KOLSA).
• The number of registered users for mobile smartphone banking in Korea rose 55% from 13.2 million users in 2012 to 37.1 million at the
end of 2013. According to the central bank, transactions made via mobile banking were valued at 1.37 trillion won per day in 2013,
rising 59% from the previous year. The number of inquiries per day was 21.3 million a day in 2013, growing 66.5% since 2012.With the
boom of mobile banking and shopping, mobile wallet and mobile payment is becoming more prominent.
• M-PESA is a mobile phone–based money transfer service launched in 2007 in collaboration with Kenya’s dominant mobile network
operator (MNO), Safaricom. M-PESA was started and is owned by Vodafone.
• M-PESA has been highly successful and, along with two m-money companies in the Philippines, is the best example of a typical m-
money service for the unbanked and under-banked. Initially launched in 2007 for person-to-person (P2P) transfers,1 by 2010, M-PESA
had more than 9.4 million customers (figure 2.1) and more than 18,000 agents, and accounted for US$5.27 billion in P2P transfers.
There is scarcely a household in Kenya that is not an M-PESA user. Between March 2009 and March 2010, more than 13 percent of the
Kenyan gross domestic product (GDP) was transferred through M-PESA.
• As a money transfer service, M-PESA started by serving the needs of the many families split between rural and urban areas. It has since
grown to provide many other financial services (but not utility or public transport payments).
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MOBILE OPERATORS CHALLENGE
• Despite the growth in usage of voice and SMS and increasing numbers of data
subscriptions, ARPU rates have declined across every region globally. The overall
global ARPU rate has fallen by 7.6% p.a. from US$19 to US$14 per month, with the
highest reductions in 2010-2012 seen in Africa (-10% p.a.) and Europe (-7% p.a.).
• The falling ARPU rates indicate that average mobile tariff prices have been
decreasing. In some cases this could reflect price decreases but it is also being
driven by the growth of multi-SIM in developed markets, where a user’s second
SIM is on a lower tariff, perhaps for personal use or data use only. In developing
countries it is also a consequence of the market opening up to lower income
segments which have a lower ARPU.
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THE OPPORTUNITY
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Financial institutions around the world compete against one another trying to attract
and retain the same middle- to upper-income retail customers year after year. Yet
there is an enormous market that most banks are ignoring — and that nonbank
competitors have begun to cultivate effectively: the world’s 2.7 billion adults who are
either unbanked or under banked.
More than 2.7 billion people in developing countries do not have access to basic
formal financial services, such as savings and checking accounts.
Mobile technology is a channel that, once in place, allows for the delivery of other
low-cost financial services bringing banking to unbanked and underserved people.

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THE OPPORTUNITY - M MONEY Channel
• As predicted in WPR 2012, the global m-payments market continues to grow rapidly, powered by innovation and
demand. In line with industry estimates, the global m-payments value reached $256 billion in 2012, and is expected to
grow three-fold by 2014 to a total of $796 billion.
• Peer-to-peer (P2P): As domestic money transfers or international remittances.
• Consumer-to-business (C2B): As retail payments at stores, mobile online payments such as those made on eBay or to
purchase ringtones . (using the payment application built for the mobile.)
• Business-to-business (B2B): To replace cash in the supply chain, in some regions such as Africa.
• Business/Government-to-Consumer (B2C/G2C): For salary disbursements and pensions–these payments are largely
seen in African markets where infrastructure for other payment instrument is under-developed, and innovations such
as mobile money help incoming payments reach beneficiaries.
• With increased uptake of mobile payments in 2012, the industry has predicting 58.5% growth in mobile payments to
2014
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Email : zia@ventureart.biz
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HIGHLIGHTS OF FINANCIAL ANALYSIS
1. Capital of KD1m through 10m Shares of 100Fils per share
2. Available shares 6m Shares.
3. Operation will be EBITDA positive from second year
4. The operation will break even on the second year and will be self sustaining
thereafter.
5. Revenue forecast to start with is primarily from Oredoo, Viva, KBE and
Merchants as well as rental income from POS terminals.
6. First year net revenue is estimated at KD 829K which will increase steadily to
KD 2.1 Million by second year.
7. The operation will have accumulated KD 22.09 Million cumulative profits by
sixth year
8. The present based on sixth year estimated cash flow is KD 19.19 Million which
has a present value of and exit valuation of 79 million at multiples of 7.
9. The revenue model is fully based on transactions fees for all payments and
fixed fees for loyalty and campaign management.
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Email : zia@ventureart.biz
Whatsapp : +965 67086552
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New revenue channels being developed to be added to current portfolio of products
and services.
1. Currently negotiating with two providers for Airtime Aggregator
2. International utilities bill payments
3. Mobile Wallet Micro-financing Currently Negotiating with Connecting Worlds
4. Virtual Credit Card Undergoing final negotiations with MasterCard
NEW PRODUCTS & SERVICES
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